Volker on Mobile

There have been reports (referred to by this here) pondering if Motorola grabbed an “exclusive” deal with the Google-led Open Handset Alliance for Android 2.0 on its Droid (or, in Europe et al, Milestone) handset. There does not appear to being any formal confirmation of this but it was mentioned that, anecdotally, other vendors (and fellow members of the Open Handset Alliance) like HTC, LG, Kyocera and Samsung were still deploying version 1.5.

They quoted industry analyst Ross Rubin as to why Android 2.0 debuted on a Motorola device:

[...] There could be several reasons. Verizon’s subscriber strength and more direct competition with AT&T and the iPhone may have led it to push for Android 2.0 to be more competitive. Or it could be simple product development timetables. Moving forward, HTC will want to put its Sense user experience on top of Android 2.0, which requires development time. Google wants a healthy Android ecosystem and a competitive Motorola contributes to that.

The article went on to refer to the respective releases for 1.0 and 1.5 (both to HTC). However, one might argue that, for the first two releases, there was not much harm done in working more closely with HTC as they were the front-runners on deploying an Android phone, so that the concerted marketing buzz etc might have been justified. However, now that there is a large number of vendors deploying, one might query the compliance of the term “open source” with such exclusivity arrangements.

It also highlights the dominance Google has in the Open Handset Alliance which might, longer-term, lead to assertions that Google is in fact using the open source road as a cover to push what is effectively an OS largely driven by them. I am not implying that it is and a healthy ecosystem with multiple strong is important in particular for the launch of a new OS in a space so full of powerful multi-nationals but there is a fine line to walk in order to get it right.

There have been rumours galore about Apple’s exclusive deals for its iPhone all over the place (see e.g. here for Verizon). New reports have now surfaced that appear to confirm that Apple is looking at this option for both the US and the UK (and, if this works, presumably also for other territories):

In the UK, T-Mobile confirmed it was in talks with Apple over stocking the iPhone 3G (the 3GS remaining exclusive to O2, which also has its hands on the Palm Pre) and Orange is “believed”, to be as well.

In the US, the Verizon discussion has been around for a while. A new report now suggests that losing the exclusivity would spell doom for AT&T: the report estimates that as much as 30% of AT&T’s customer are with the carrier solely because of the iPhone exclusivity. This sounds a little high to me: after all, the iPhone penetration in the US is much lower than that (it held just under 11% market share globally in Q1/2009). Are they saying that all the other users (those with the less fancy handsets) just stay on AT&T to share into the iPhone limelight? No, I thought not…

Apple is in any event in a beautiful position at the moment: so far, most of its competitors’ “iPhone killers”(Palm Pre, Blackberry Storm and innumerable devices from Samsung, LG and Nokia) have failed to challenge its numbers and, quite literally, all of the app stores set up by competitors showed meagre results compared to the – now – 1.5 bn (!) downloads in a little over a year from the Apple App Store. The good folks from Cupertino are therefore now in a pretty good position: they proved (a couple of times now) that they shift 1m+ devices – on the opening weekend! They bring a lot of sex appeal in which the carriers, not generally known for coolness, can bask. They cracked the content dilemma and produced a thriving developer community, which made people actually use their phones for all these things that have been promised for so long (iPhones are connected, most others can connect). In short: in carriers eyes, they are – aside from the horrible fact that Apple takes a healthy cut – a really good thing for networks that see themselves locked into cut-throat pricing wars over voice and SMS (bringing in, anecdotally, up to 50% of European carrier profits over the past 5 years) and craving for a way to increase user ARPU (app revenue on the iPhone is, apparently, $27 per device). Happy days…

The title of this post is not meant in any way derogatory but with all the hype about the iPhone it is sometimes easy to forget that we are talking about a niche product that will probably remain a niche product (albeit a powerful and cool one!). In the rest of the world (feature phones aside), a few consortia are fighting for the open-source market, which is – let’s face it – a considerably larger piece than the small premium segment served by Apple.

Today, interesting reports surfaced (or re-surfaced?) according to which Verizon Wireless and Apple are in discussions about bringing the iPhone to the former. However, because Verizon runs on a CDMA network and Apple has only ever supported GSM, commentators reckoned that this deal might be for Verizon’s next-generation LTE network. And this is when one can start dreaming…

There’s new data out on the bestselling handsets, and this time it is not being derived from accessory sales (which may have its flaws as I pointed out here) but from a survey amongst service reps and store managers across the 4 big US mobile networks (Verizon Wireless, AT&T, Sprint Nextel and T-Mobile; these comprise 85% of the total subscriber base). Now, this would arguably reduce the recorded sales for the iPhone since this is also being sold via Apple’s own retail stores as well as Walmart, Best Buy, etc. So again not an entirely accurate yardstick, huh?

Did you know about Vodafone’s Flipfont app? No, I didn’t think so; it seems to have gone more or less unnoticed. Well, it allows you to – listen to this – customise your phone frontpage. Woah! How cool is that? The downside? Well, you need to pay £1.99 for the pleasure, per screen! I don’t think so… And, apparently, (now) so does Vodafone. Amidst the iPhone/AppStore rage and the “revelation” that UI might actually matter to people, they seem to have realized that changing a font will not necessarily change the uptake of consumption to new levels. And because they cannot have the iPhone (although it has the Blackberry Storm, which is performing much better than the initial damning reviews would have suggested), they will launch their very own app store, or so they said (if you read Dutch, that is; how nice that we have a Dutch blogger amongst us who translated it for us).

“If you think of three players, China Mobile is very strong in China; it’s a big country. Vodafone is very strong in Europe, Africa, India. Verizon is very strong in the US.

“If these three companies could work more closely… in the management of customers, procurement and service creation, we could be unbeatable, quite frankly.”

January is MIDEM time (even though, sadly, I cannot go this year), which means that music dominates the news. In an interview, the EVP of Universal’s eLabs, Rio Caraeff on the revenues of Universal Music Group that:

And the winner is… China Mobile. Hard to guess, huh? Some research shows that the Chinese carrier’s brand is worth $30.79bn. Vodafone and Verizon took the other spots on the podium. The top 10 is below (courtesy of the good folks at telecoms.com). And for some (by now a little outdated) comparison for how they rank amongst other industries, see here.

The study applies a royalty based on forecast of sales, brand strength (from qualitative panel data) which priced in market share, growth, price positioning, market scope, preference, awareness, relevance, heritage and perception. They complement these slightly fluffy markers with data on turnover, subs, churn, market share, ARPU, profitability, etc and then took the average score of the two to determine the royalty rate applicable. Apply tax and (low) discount rate and off you go. Pretty simple, isn’t it? And, yes, I still think Cingular was cooler than AT&T…

China Mobile	China Mobile	China	Asia	30,793
2	Vodafone	Vodafone	UK	Europe	22,131
3	Verizon	Verizon Communications	US	North America	20,382
4	AT&T	AT&T	US	North America	18,886
5	T-Mobile	Deutsche Telekom	Germany	Europe	16,802
6	Orange	France Telecom	France	Europe	15,489
7	NTT DoCoMo	NTT DoCoMo	Japan	Asia	14,871
8	KDDI	KDDI Corp.	Japan	Asia	14,454
9	Movistar	Telefonica	Spain	Europe	10,799
10	Sprint	Sprint Nextel	US	North America	9,661

Flash maker Adobe isn’t tiring on bringing out news these days: this time it announced the “Open Screen Project”, in which it is partnering with a plethora of mobile industry giants, namely ARM, Chunghwa Telecom, Cisco, Intel, LG, Marvell, Motorola, Nokia (see also here re Microsoft’s Flash competitor Silverlight), NTT DoCoMo, Qualcomm, Samsung, Sony Ericsson (see also their initiative to marry J2ME and Flash here), Toshiba and Verizon Wireless as well as major media players such as the BBC, MTV Networks and NBC Universal.

It said “the project is dedicated to driving rich Internet experiences across televisions, personal computers, mobile devices, and consumer electronics. Adobe said it would open access to Flash technology, accelerating the deployment of content and rich Internet applications (RIAs).” This will include:

• Removing restrictions on use of the SWF and FLV/F4V specifications
• Publishing the device porting layer APIs for Adobe Flash Player
• Publishing the Adobe Flash Cast protocol and the AMF protocol for robust data services
• Removing licensing fees – making next major releases of Adobe Flash Player and Adobe AIR for devices free

Adobe says its Flash Player reaches over 98% of Internet-enabled PCs and more than 500m mobile devices today. It now expects more than 1bn handsets to ship with Flash technology by the end of 2009 (this means a year faster than previously forecasted). Flash technology is used to deliver vector graphics, text, interactivity and application logic, video and sound over the Internet. Currently, more than 75% of broadcasters who stream video on the Web use Flash technology (YouTube will be a big contributor to that number).

Following my many posts on mobile Flash (see e.g. here and here), this now looks like a real assault on the medium. Given that Flash reduces developer cost (less porting because of vector-based graphics) means it is a likely boost to the content industry: more and richer content at lower cost. Could this be it?

A while ago, I blogged about a cool new site French company Mobitween had launched, namely on user-generated games. Now, the good folks are a bridgehead in mobile Flash (they had their fingers in the code more or less from day 1). So, where is Flash Lite today?

Here’s the install base numbers as recently released:

From just over 14% to 23% in a year (yes, I know, this is based on a flat 2 bn handsets out there)… In any event, that is rather respectable, don’t you think?

Flash has the great advantage that its graphics are vector-based and therefore scalable. This means that most of the porting nightmare that contributes to 30-50% of the cost of mobile games, etc would fall away. Nice thought… It would make the whole commercial model of mobile games dramatically rosier. And it appears to be gaining traction: e.g. does Adobe make Flash Lite available on Verizon phones (and I’ve been told – confidentially – of one publisher having recorded more than 2m Flash game downloads on there already).

Flash is particularly good for casual games, which is, as everyone close(-ish) to mobile games knows, all the hype for the (small) mobile screen, and rightly so, as it is normally easier to adapt a casual game to the screen limitations (not even starting to talk about processing power) that are inherent to mobile phones. A natural fit, huh? Just look what Mobitween and their users have come up with! And I don’t even get started on Atom/Shockwave (read an interview here) and all the others out there…

Is it then that we only need to wait until Flash Lite (finally) reaches the mass market? On the web, Flash hurt Sun’s Java badly. Will the same happen on mobile? Or will Sun be smarter this time, and make sure that its currently dominant position will be reinforced by making it easier for developers to publish on their platform? The jury is out…